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Next Generation reports on comments by Nintendo's Reggie Fils-Aime, stating that the Wii will be profitable out of the gate. It's been well-publicized that the consoles offered by Sony and Microsoft are subsidized by those companies. From the article: "Nintendo, however, has traditionally avoided the 'razor and blades' business model by selling its consoles above what they cost to make. Fils-Aime confirmed to Reuters that the Wii would carry on the tradition. 'We will make a profit on the entire Wii proposition out of the box -- hardware and software,' he said. 'That really is a very different philosophy versus our competitors. We are a company that competes only in the interactive entertainment space so we have to make a profit on every thing we do.'" The comment is undoubtedly meant to assuage analysts nervous about the relatively late release date and somewhat higher than expected price for the Wii.

Sony and microsoft are not game companies. They both make money from other things. Nintendo is a game company. They make money (i.e. NEED to make money) from the game system and games. OF COURSE they will sell them at a profit!

um, hello, nintendo is far more than a game company. The part of the company you know as nintendo is the games division. There are many many other things that it has its hands in like pretty much any other major company in japan. Nintnedo has its hands in things like realestae, finance, insurance and other random industies (at one time even a brothel).

Actually Nintendo, which started out(and still is) a card manufacturer did branch out into a lot of other industries, but nowadays aside from a large stake in the Seatlle Mariners and owning a big chunk of Gyration Inc(where they got most of the wii controller technology from) Nintendo really doesn't own much else outside of the realm of games.
At one point, yes they did own a taxi service and "love hotels"(which are not brothels, they are basically hotels rented by the hour with the express purpose of having consenting adults do things in them which one would rent a hotel by the hour for)

At one point, yes they did own a taxi service and "love hotels"(which are not brothels, they are basically hotels rented by the hour with the express purpose of having consenting adults do things in them which one would rent a hotel by the hour for)

They got out of that business after all those complaints from male clients who just couldn't make it past World 2.

To look at it from another angle, Sony and Microsoft's strategies are only profitable when they max out the number of consoles they sell. The larger their userbase, the more game profits that roll in. Both companies need to be number 1, and thus the struggle.
Nintendo on the other hand doesn't need to be number 1 at all. By turning a profit on each console plus each game, they're safe as a niche player and even better positioned if it really does take off. For me, I'll be first in line to get a Wii based on the type of games available and the novelty of their design.

I seem to remember some profits analysis that I read months ago breaking down what each of the big 3 earned leading up to the release of the Xbox 360... according to that report Nintendo was far and wide the most profitable of the three despite the fact that their install base was dwarfed by MS and Sony. Basically they didn't take losses on anything they sold... and a majority of the games they sold were 1st party, which funneled more m

To say they are turning a profit on each console is a bit optimistic. They are going to be making a profit on each console *if* they hit some projected number of sales. For instance, if they only sold 1 console, they would not make a profit on it.

"Well its not just the $250 price. Its the $250 price with only one controller, and complete controllers costing $60. 250 Dollars didn't convince me not to purchase it, $310 did. Plus, no ether port. I have to buy a wireless adapter. --30 bucks more, I'm sure. . Ochhh $340.. oH wait. there is more. You don't get Opera for free/ Gotta purchase it. $10-25. ukkk. $355. $355 for a OC GC with wii-motes. Oh yeah, don't forget the tax. OK $400!! Damn I think it will be a great system, but it is not cheap. It is no

How much will it cost for you to fund Opera for a development and release of a port for the PS3? More than 10-25. Also... there is no tax items shipped to you online except if you live in the state where that company does business. Regardless, PS3 and 360 would have tax as well.

How is the controller situation any different from any of the other next gen consoles? How about a $400 Xbox 360 with one controller, or a $600 PS3 with one controller. The Xbox 360 controllers are $50 a piece for wireless and you don't get two with the console either. It makes sense that the wiimote would cost a little more with the motion sensing, speaker, etc. I don't think the $10 difference is really worth bitching over. At least Nintendo sells it in two pieces so you could spread the cost out if you w

I wouldn't mind if it came with a second controller, but I'd rather have the choice to buy it instead of paying more for the console itself. Maybe because I'm more excited for Metroid and Zelda than the party games, which will be fun too. Some of the wii sports titles may only need 1 wiimote, like bowling or golfing where you take turns anyway. I doubt MS will have to drop their price for a while since the consoles are very different. For many people they will probably compliment each other. Now, the PS3 on

I was distinctly unimpressed by the E3 video of Metroid, it looked boring, it looked like Halo.

I could never get into Halo myself. I did play it with a friend after he kept telling me how good it was. It seemed generic and boring to me, just like any other FPS. But I loved Metroid Prime, it's more about exploration and puzzles, but still of course a shooter. Honestly, the video from E3 wasn't very impressive at all if you ask me. If you get a wii I would recommend picking up the first Metroid Prime (I've

I was wrong about Opera. However, the main point for me was this: Even if it beats the competition in price, it is not cheap enough for me. I'd rather have a gamecube with 2 wii-motes and the sports game($100+60+60+ ~30)= 250, than the wii with only one remote. I think they made a mistake because their wii sports game will be most fun with two people playing.

All three companies intend their console businesses to be profitable overall. While Sony and Microsoft clearly want to wipe each other out, none actually wants the businesses to make a loss at the end of the day.

Game console businesses have two sources of revenue (well, three now, with the recent addition of online services) - the major two being the console itself, and the game sales.

The expenses are the costs of making the consoles (including the costs of the console's development), and the costs of reproducing the games media together with the royalties that get paid to the developers to cover their costs and profits.

What Microsoft and Sony are doing is lumping the whole lot together. The problem for them is that the consoles cost considerably more to build than anyone would be prepared to pay. So they're selling them for a price that doesn't recover costs, and hoping revenues from game sales (and online services) will counter the losses they're making on that. This is called the razor blade model, as it reflects a supposed business model used by Gillette where the prices of razor blades were designed to offset subsidies given to razor blade holders.

Despite a prevailing wisdom that this is common in the games console industry, for the most part it's a recent development. Sega did it for one console, and failed miserably. Microsoft did this for the XBox, but there's no evidence that Sony or Nintendo did the same thing for the PS2 or Gamecube.

What Nintendo just said is that that's not the model they're using. The Wii is low cost because it's low cost, not because it's subsidized. While the exact hardware specs of the Wii are still unconfirmed, it is known that many developers received overclocked Gamecubes as development platforms early in the Wii's history. The graphics are designed to look good on standard definition TV sets (480 lines of resolution, or thereabouts.)

Nintendo plans to make a (small) profit on each Wii, and on the games. As such, each sell is guaranteed positive revenue. If it has to make more consoles and finds it sells fewer games than expected, they're not going to go into the red because of that.

Despite barely making a dent in sales last time around, Nintendo ended up being the most healthy in the games console business of all three players. Nintendo can follow this strategy for decades, be in "third place" every time, and, as long as they're realistic, they'll stay alive and healthy even if Sony and Microsoft, following the opposite strategy, end up close to death's door.

none actually wants the businesses to make a loss at the end of the day.

Actually, I think in this case they don't care. There's much much more at stake to drive the other (Sony or Microsoft) out of the business. For Sony, the PS3 doesn't just mean game revenue, but in their eyes, Blu-Ray revenue. Winning the HD format feud is much more lucrative in the long run than game consoles.

As far as Microsoft, they're desperatly trying to establish a foothold in the home theater environment. They want (perhaps ne

That part is key, it means it is suspected to be true, but there is no actual proof. I have never heard from an authoritative source that Sony actually lost money on the PS2 hardware, and they certainly did not on the PS1 hardware. The only consoles to ever have confirmed to sell under cost were: Dreamcast, Xbox, Xbox 360 and, we assume, PS3. The PSP might also, but, again, no authoritative source available.

No, it doesn't need to make money from the console sale itself. THe reasoning from you and Reggie is specious (like most first posts).

You can STILL sell the console at a loss. Look at it this way.

By lowering the price from 250 to 150, they go from making 50 per console to losing 50 per console. But they sell 2 million rather than 1.5 million consoles. If there is an attachment rate of 3, and a per game profit of $25 (half - since most N games are first party anyway), they make 12,500,000 more.

By lowering the price from 250 to 150, they go from making 50 per console to losing 50 per console. But they sell 2 million rather than 1.5 million consoles.

Except that, just like the Xbox 360(1), and unfortunately (let's be realistic here) the PS3, the Wii will most probably sell out this holiday season. They won't sell more by lowering the price, because there won't be any more to sell. By selling it $250 instead of the expected $200, if they manage to ship and sell all the 4 millions of the units they

y making a 'profitable', underpowered, overpriced console they are going to loose a lot of cross platform publishers.

Sir, agree completely with you in that the Wii will make some publishers loose, at their stomach of course.

Other than that, I cant find a relation between those two concepts. More publishers will be attracted to the Wii ifnot for anything else for the mere dev kit price, and as everybody says, those "cross platform" publishers have certainly used the GameCube already, so (as Wii bashers love

Do you have a mouse on your computer? The wiimote isn't much more than a pointer. It's gyros are really inaccurate and only used in sudden movements. It can be accurately weilded and used like a sword like everyone first imagined.

Do you have a mouse on your computer? The wiimote isn't much more than a pointer.

It is because of people like you that science does not develop =oP.

The difference is that this "pointer & gyros" will come togheter will dozens of games *specially* designed to exploit its capabilities.

I am sure there are already input devices with gyroscopes and other more interesting technologies available for computers, but the difference (and that is what can make a console *better* than a computer for gaming) is that b

the video game analogue of "razor blades": the Atari 2600 was not originally designed so that anyone could write software for it. However, other people did(something for which Atari received no royalties for) and eventually the glut of titles(some pushed out by Atari itself) helped to doom the system in the 83 crash.

Fast forward 2 years and Nintendo comes along with their new machine but a different outlook: Nintendo will approve or dissaprove each game released for their system. To enforce it, Nintendo patented a special type of chip that had to be put in each video game before it would play on the NES, and was able to collect royalties on every game sold.

I'm actually worried about a (minor) crash in the Videogame market centered around the PS3 due to how Sony has positioned themselves in this generation. At $600 the PS3 is going to start off selling very slowly compared to how the PS2 sold, at $60-$75 games are also going to be bough at a much lower rate then they were purchased on the PS2, and at $10 Million-$25 Million for development costs game developers are far less "flop tolerant" as they have been in previous generations. What this means is that ther

I think you're confusing the concept of "razor and blades" marketing to "Intellectual Property" controlled marketing."Razor and Blades" is the concept that you sell the base unit (i.e. console or razor) at a loss becuase you sell the consumable (games or blades) as enough or a markup to make the money back and then some. Because once they buy a razor from you they have to come back and buy blades every week. In the long run that can be more profitable by giving the razor away.

Nintendo continues it's strategy of not being dumb. Of course they want to sell the console for a profit. The 360 and PS3 count on every sale leading to X number of games before they start turning a profit, whereas Nintendo counts on every sale turning a profit and every game turning more profit. Selling consoles at a loss is a risky business. Yes, it gets your console out there, but you then need to sell a good number of titles. Selling consoles at cost is the smartest way to do business, because you don't assume a damned thing and you make money on any games people buy. But yeah, being slightly above that doesn't hurt at launch. Nintendo does one thing and does it well: Video games. It's not that they are in dire straights right now, it's that they know this market very well. They made the Gamecube profitable. They know this industry. Selling consoles for profit is brave in that it can hurt your ability to get up your market share. But losing money on every single console so you can sell more consoles and lose more money doesn't make a lot of sense, does it?

If for say their actual cost is $230 or something and they would lose money on a $200 console $250 sounds like a nice price point. If in fact that are making these (including all other cost) for $190 and selling it at $250 one could argue it might be worth it for them to sell at $200 for a tiny profit, leading to more game sales.

Either way its their buisness and they can run it how they want to. (shocking idea on slashdot hu?)

One thing to keep in mind for Nintendo is their cost is in yen.The one time Big N had a losing quarter was during a period of currency fluxuations between the yen and the US dollar.

In Japan, the price is Y25,000 ($213) so they'd have to match at least $213, (it's more important that the foreign markets are priced higher, see above), so probably $225, but that's just a bizarre round number, so toss in Wii Sports and ratchet it to $250. Simple.

In Japan, the price is Y25,000 ($213) so they'd have to match at least $213, (it's more important that the foreign markets are priced higher, see above), so probably $225, but that's just a bizarre round number, so toss in Wii Sports and ratchet it to $250. Simple.

How does that explain selling them for $330 in Britain? I know I won't be buying one because of that. Thanks for trying to rip us off Nintendo.

If for say their actual cost is $230 or something and they would lose money on a $200 console $250 sounds like a nice price point. If in fact that are making these (including all other cost) for $190 and selling it at $250 one could argue it might be worth it for them to sell at $200 for a tiny profit, leading to more game sales.

I really doubt the $50 price increase will hurt sales that bad. They expect to ship 4 million units by the end of the year, and unless there's a horrible hardware failure worldwid

It may reduce demand at launch -- I know I for one would have been a first adopter at $200 but am having second thoughts at $250 -- but in the long run I don't think Nintendo will be hurt by it. The first few production runs will sell out to the diehards at $250 easily. Maybe next year, once demand has begun to wane, Nintendo will be able to make a price cut or improve the bundle to make the system more attractive to non-acolytes.

This makes sense.. during the whole PS2 era, I've only bought maybe three new games in all that time. I usually only buy off the used racks or trade with friends, which I imagine doesn't put that money in Sony's pocket again. I'm not sure exactly how the math works out, but I wouldn't be surprised if I haven't even subsidized my console yet despite having a sizable library of games.

This makes sense.. during the whole PS2 era, I've only bought maybe three new games in all that time. I usually only buy off the used racks or trade with friends, which I imagine doesn't put that money in Sony's pocket again.

On the contrary. By buying off the used racks, you're making it possible for those who purchase new to continue doing so. Joe Gamer is more likely to purchase Madden 200X at $50 new if he can trade in the last two new games he purchased for credit; credit which comes from you buying u

I f there isn't two controllers in the package, then they are being dumb. They market the machine for its social aspects. ie have fun with the family. As it is, I have to pay 60 more dollars above the initial investment just to experience the social aspect that they promote.

I get the impression that Nintendo was perfectly willing to sell the system at a loss, but given the amount of room that Microsoft and (especially) Sony left as far as price differentiation, it makes sense for Nintendo to sell the Wii at the highest price point possible. Its still cheaper than the alternatives, and I don't expect demand to lessen significantly, and should MS or Sony ever lower their prices, Nintendo has room (and now a budgetary surplus) to respond in kind.If anything, if the PS3 sells as

Maybe. But as far as we know Nintendo has never sold a system at a loss. They generally optimize during the design phase to keep manufacturing costs low. The also license external IP to recieve a cut of hardware and software profits rather than hardware cost (see the Nvidia / Microsoft fight), thus effectively spreading risk around their partners.Note that this way they don't need to be #1 to be profitable, and that it's actually difficult to lose their shirts.

But as far as we know Nintendo has never sold a system at a loss. They generally optimize during the design phase to keep manufacturing costs lowAnd not only Mario & Luigi get lower salaries than their GTA counterparts, as they also help sell merchandise items, which would be hard to do legally in the case of GTA and similar franchises.

That makes sense except for one thing, it ignores the psychology of a parent who knows nothing about gaming.

Even being only a little cheaper, the Wii comes with a game. It doesn't matter what the game is, a parent who knows nothing about gaming will choose a system with a game over a system without a game 9/10, even if the system with a game is more expensive. So basically, unless the person they're buying it for requested a specific system, or a specific game, to a parent the Wii is still more attracti

The comment is undoubtedly meant to assuage analysts nervous about the relatively late release date and somewhat higher than expected price for the Wii.

People have predicted for months that it would be $250. Only recently did the media put their fingers in and try to 'predict' it would be $225 or even $200. The only reason they even considered those crazy prices was:

1) Every Nintendo console so far has been $200 at launch. Obviously, they couldn't keep that up forever, especially since this system is quite a bit more complex than the previous ones.

2) Exchange rates. Any fool knows that exchange rates only set the price range of a product, not the exact price. The fact that it was $225US when converted on that date didn't mean anything except that it wasn't likely to be $200 here. Nobody in their right mind uses an odd number like $225 when pricing here, at least at launch.

As for the late date... Are we still predicting the PS3 will actually be out before that? I'm still predicting shortages and mayhem for the ps3 launch... It's still a tossup on the Wii launch. I'm hoping they have enough that I get one, but who knows? If there aren't enough ps3's, Mommy and Daddy are gonna buy Wii's for Johnny instead, so he'll have a Christmas present to open.

And maybe that's Nintendo's logic... Capitalize on the failure of Sony. If they launch before Sony, they aren't quite as 'new'. If they launch soon after, amid Sony's sellout chaos, they can pick up extra launch sales and make the figures look better.

I could just see the media spin: Nintendo fails to sell out, slow start for Wii.

But if they wait until after: Sony sells out, loses sales to Nintendo's Wii Launch.

Let's look at that "$200 Launch" thing. To keep the $200 price point, Nintendo has continually had to give us less with the system.

80s: The NES is $200 at launch. It comes with 2 controllers, 2 games, a light gun, and a crazy robot accessory.Early 90s: The SNES is $200 at launch. It comes with 2 controllers and a game.Late 90s: The N64 is $200 at launch. It comes with 1 controller.2001: The GameCube is $200 at launch. It comes with 1 controller.

ROB was only in the NES deluxe set, which I believe cost more than $200 and was discontinued shortly thereafter.

Also, an often forgotten piece of trivia: Nintendo 64 was launched in Sept. 1996 at $200, but the price was announced to be $250 at the prior E3 (or spring TGS, I forget exactly) and was dropped only about a month prior to the console's release due to price changes from Sony and Sega.

I did a Google search, and I believe you're right. The NES seems to have come in two flavors at first:

1. Deluxe Set ($250) which included Duck Hunt, Gyromite, and ROB2. The Action Set ($200) which included Duck Hunt and Super Mario Bros. (The original version had two cartridges, later they replaced it with a single cartridge that had both games on it...)

The NES western launch had two configurations both included the NES, two controllers, RF adapter and PSU:1. The Deluxe Set which contained R.O.B., a Zapper, and two games: Gyromite and Duck Hunt2. The Control Deck which came with Super Mario Bros.

The Action Set was not a launch configuration as it came out three years later in 1988. This does not necessarily mean that there were not bundles containing both SMB and Duck Hunt before this date. Sadly, Nintendo altered the bundled

The Action Set wasn't available at the initial launch. There was the Deluxe set and thhen just the "Control Deck" - a console only version. Super Mario Bros. was available as a seperately boxed cartridge.

The Wii is not much more advanced than the gamecube. The gamecube is five year old technology that sold (for a profit) at $200 when it was new technology. The Wii costs significantly less than $250 to make, I suspect. The motion sensor technology isn't that expensive. Also, they removed the DVD playback, that they promised to include, to keep it cheap. To keep it cheap for THEM, not us... hence, it's still the max $250. If you think they removed DVD playback because it wasn't needed, you're foolish. Read Iw

No, the combination of all the technological parts related to processing power in the Wii is a rip-off. With any console, you get more than the machinery, you get the fun value, which is basically everything else that the console can provide to you *through* its parts. The fun-value is only created through the purchase of games, though. The Wii is the only console of this (and the last, and arguably others) generation to really differentiate itself by what it off

Bullshit. It has never been done right. There is a lot of R and D in that. Also, those controllers have to be nigh unbreakable. Nintendo spends money on system and controller durability. This time around, along with increasing the graphical power, RAM, and internal memory, they reduced the power consumption of the system and kept all GameCube ports. Add to that the fact you are getting built in wireless and a composite video cable in the box and you can see that there is some value to this machine.

They made it small because they wanted it to fit in tiny spaces with your TV (they stressed that EXTREMELY in the interview)... yet they removed DVD functionality so that you have to put a DVD player beside it to take up more space?

So you were going to throw out your DVD player when you bought a Wii?

Also, have you seen Virtual Console game prices? $5, $8, and $10 for NES, SNES, and N64, respectively. Why so much? All it costs them to sell them to you is the price of their auction software and the bandwidth and servers to get it to you. Way too high for what it is, even if it isn't THAT expensive.

The NES classic games for the GBA have been selling like hotcakes for $20. People who own Oblivion have been buying HORSE ARMOR for $2.50 on XBOX live. Why the hell would they give their shit away if they can make money off it? You also forget that their online gaming system will be free. People who want Tecmo Bowl get Tecmo Bowl for $5 and you get to play Super Smash Brothers online for free. Damn you, Nintendo!

Is it worth $250 for the technology you get? Probably not. I'd suspect the highest bang for the buck is the PS3 even if it is expensive. Xbox 360 isn't a bad deal either. The Wii, for what you get, is a rip off. Overclocked Gamecube with a new controller and (finally) online support.

Same argument was made for the DS vs. the PSP. Problem with the argument is that the PS3 and the Wii are two very different machines. The PS3 is a souped up PS2. The Wii is a kind of video game machine that has never been seen before. So you can pay $600 for $1000 of hardware and get a graphical upgrade, or you could pay $250 for $250 of hardware that you can't find anywhere else. It depends on your priorities. The PS3 may cost $1000 to make, but it's worth about $200 to me. The Wii may cose less than $250 to make, but $250 is less than I would have paid for what they are offering.

However, acting like Nintendo is better than Sony or Microsoft is stupid. If anything, they're just as bad, if not worse.

Every Nintendo console is nearly indestructable. They treat their customers well and fix and problems that do arrive without much hassle. Both Sony and Microsoft settled class action suits in the past generation for faulty componants that they would not replace.

Botched launch date for old technology, the Leizpeg event where they kicked Nintendo loyalists in the balls, dropping DVD to save money, $60 controllers for a system that is supposed to be heavy multiplayer, expensive VC games, overpricing, etc.

The wireless X360 controller is $50. The PS3 controller will likely be that much or more. Again, Nintendo's controller offers things that other controllers do not, and unlike Microsoft and Sony, you can be sure that it will be built like a rock. DVD playback is trivial and therefore unnecessary. I currently have 2 machines that play DVDs that are not DVD players. How many more do I need?

Serously, go buy a PS3 or a X360 if you want, just stop sucking Sony's and Microsoft's respective cocks.

Nobody in their right mind uses an odd number like $225 when pricing here

Yeah but you try buying an item in the USA using cash. Most american goods have very odd prices once you take into account tax. Is there any other country in the world where an item is marked as $9.95 on the shelf but you can't buy it with a ten dollar note, since they add some random amount to it? Would it hurt americans to tell the truth about such a small thing as the price of a chocolate bar in a grocery store? </pet_rant>

Actually, our sales tax strikes me as a very good way to tax. It's the closest thing we have to a 'flat tax' that a lot of people push for. The rich buy more, so spend more on sales tax. The poor buy less, so pay less tax. (The exception is unprepared food. There is no tax on that. Exact expections vary from state to state, though.)And yeah, there's another country. Canada. They actually have 3 different sales taxes in many places in Canada. Some of our states (I live in 1) only have 1 tax.

I got burned in the past. I ain't ever buying MadCatz hardware again. They break easily, and they can't even make a turbo controller that beats my own finger in button-mashing games. What's the point of "turbo" if it's slower than what I can do? I remember my NES-Advantage joystick, now THAT was turbo.

Yeah... $60 for the full second controller hurts. Probably still won't stop me from getting one since it is necessary to play the Boxing game in Wii-Sports.
Wii + second remote + Zelda = $360 for unit and two games
PS3 = $600 with one controller and 0 games.
Math still works out for me.:)

I don't know if anyone's investigated it yet, but I was wondering if the nunchuk isn't included with the $35/40 wii remote purchase. It would make sense then, that you could buy another nunchuck attachment if something happens to your old one without paying the full price of a remote. Hopefully, what I'm thinking is correct.

The $250 would be a lot easier to swallow if there was a second controller in the package.

I mean come on, it is the Wii ("We") right? Play together? Wii Sports and one controller makes no sense.

I can see parents buying this for their kids. The kid opens the box, sets everything up and then wants to play baseball, or tennis, with dad. Oops, we can't experience this fun new system together because the system only came with one controller. You can sit still on the couch and watch daddy play though.

But look at some of the games that are included in Wii Sports (bowling, baseball, and golf) which really don't need multiple controllers to be fully enjoyed by multiple people. Unless the baseball part of the game allows one person to pitch (I don't think I've seen this reflected in any of the commercials showing it off) and the other to swing, players would just take turns by passing the controller around. The same thing could be said of bowling and golf, where it's not necessary (or perhaps even possible

Maybe if you are a delusional idiot would you think they might sell it for $150, and to be fair, I had a small delusional idiot hope that it might be $200 like the Gamecube, but that didn't for one second knock away the reality that it would more than likely launch at $250.

Well, past experience (Gamecube) said $200 would be a cute price point.But think of what you got with the GC - a console, and a power brick and a controller and a video cable. Not much at the end of the day. What do you get in the Wii box? A console, power brick, controller, nunchuck adapter, sensor bar, bundled game (I think we all expected a demo disc at least to test the controller out on some little games) plus all the extra features inside the console itself - wireless ethernet would be the primary one

And the console is sold at a $200 loss, that means each game has to make up $20 just for the console manufacturer to break even. Hence why this generation's games are yet another $10 more expensive than the previous generations.Online services do add another revenue source however, which can help.

So the Wii will make a small profit for Nintendo, every game will make them a profit, online services may make them a profit. The games can be sold with far less licensing fees as well, hence why Wii games are chea

Let's see Microsoft and Sony make billions in profit from their home console business...

That's hilarious. I was just thinking about this and have come to the conclusion that MS will be out of the console business within 5 years unless something extraordinary occurs this generation. They lost over 5 billion dollars on the Xbox. That is >$5,000,000,000! This all while they had Halo and Halo 2. You may recall Halo 2 sold over 2.4 million copies on its first day and over 7 million in its lifetime.

Second point, that 5 billion lost, does that include revenue from games and Live? Care to give a cite somewhere?

Microsoft does not release numbers for individual products, so no the number is not for just the hardware. Here's links to MS's Earnings Statements for Q4 2004 [microsoft.com] ($1.21B lost, shows 2003 as $1.19B lost)), Q4 2005 [microsoft.com] ($.39B lost) and Q4 2006 [microsoft.com] ($1.26B lost). What you're looking for is results for the division called 'Home and Entertainment'. As far as I'm aware the only quarter that division made money

MS achieved second place in a established market their first try. That is far from a 'failure'.

MS achieved last place in profits and they did so with entirely borrowed funds. They are a business so in the end, profits is all that determines success. Which was my point. They made a splash, but even with such hits as Halo and Halo 2 they couldn't gain a profit overall.

Second point, that 5 billion lost, does that include revenue from games and Live? Care to give a cite somewhere?

1. This is the console market, everyone else either grabbed first place on the first try or quickly faded into obscurity. Second place at a huge loss isn't something to brag about there.2. The 5 billion dollars are mentioned in Microsoft's SEC filings (more exactly, added up from the filings over the lifetime of the XBox) and include the entire games division. Unless you believe MS is cooking the books that should include everything.

Like when Gilette was getting OUT BLADED so they were like, "f#@!$ it. We're going to five blades. Why anyone would need such a feature is honestly beyond me, but hey lets pack as much STUFF into the Razor as we can and people will buy it."

It's no secret that Sony wants to use the PS/3 as a vehicle to get Blu-ray units into people's living rooms. They expect to lose money on the consoles, but make it back through licensing from game makers and (much) more importantly sales of Blu-ray movies from their entertainment division. Also, if Blu-ray becomes a standard - they'll collect royalties from other consumer electronics manufacturers and other content providers.Microsoft's stock price as been stuck in a narrow trading range for several years

You know, you bring up a good point I don't think a lot of people fully appreciate: - and this should mean that the full-price games will be a lot cheaper, too, since Nintendo doesn't need to claw back money lost on the hardware.

Since Sony/MS are trying to claw that money back, it means that perfectly legal things that hurt their software license revenue will probably be targeted by them with lawyers who should know better. Imagine that because of the expensive PS3 titles, some kids in a dorm or the same c

The broader point is that Nintendo will be shipping a system capable of graphics, wireless web browsing, playing music, storing data, and whatever else but they don't need to do much of anything to protect it or lock it down.Nintendo can create a Linux boot disc that lets you do web browsing, play music / videos, write documents in ooffice using wiimote as a 'giant pen' to write in 'air cursive', etc. Or if somebody else does that they won't care one bit, because even if people buy their system and never p

I'm not saying Nintendo aren't selling the Wii at the right price for the UK, but don't prices in the UK include sales taxe(s)?Most people in the USA won't be paying 250$USD for their Wii. They'll be paying 250$USD + 8-9% in taxes, depending on which state they live in.

As another example, here in Quebec I'll be paying (279$CAD + 6.0% GST) + 7.5% PST (Yes, that's a tax on top of another. Not just added, multiplied). That means my "279$CAD Wii" ends up costing me 317.92$CAD. That's 38.92$CAD in taxes.

If they upgraded resolution, they would have to uprade not just the video card, but also add ram and improve the CPU - all of which would have added to final cost.

I think they are doing the smart thing and sticking with standard resolution for just 1 more generation, unlike Xbox and Sony. By the time the next generation comes rolling around, Nintendo can offer this upgraded resolution very cheaply, due in no small part to Sony/MS massproducing it to a large extent.

I think what killed the Saturn was not being high end from the get go. It's generally agreed that Sega planned on making a single processor system with limited 3d capabilities for that gen, and added the second processor late in the game to compete with Sony's PSX. Sega probably didn't want to risk gutting their arcade business with a console that could compete head on with Virtua Fighter 2. Tekken 2, OTOH, was generally considered better on the PSX than in the Arcade (Tekken 3 restored the balance, but now

The only problem with bundling it would be that you'd really need a bunch of controllers to play it to its full potential. Throwing three extra controllers in would've made the console significantly more expensive.